The Importance of Insurance in Hurricane Season

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To put this into context, worldwide in 2017 natural phenomena caused losses of around 330 million dollars -due to the earthquakes that were added that year-, in 2018 for 186 and in 2019 for 150, of which there were only insured and were compensated 135, 86 and 52 million dollars, respectively.

From the foregoing, it can be inferred that in the last 3 years not even 50% of the losses were insured   and natural phenomena not only do not stop, but a substantial increase in intensity is forecast.

Indeed, the trend is that year after year, derived from climate change, hydrometeorological phenomena gain more force and frequency, having a greater impact on the level of damage they will cause.

This year, the hurricane season has begun, for the Pacific Ocean since May 15 and for the Atlantic as of June 1, with the National Hurricane Center forecasting a considerable increase in the number of cyclones due to climate change.

Between the Pacific and Atlantic Oceans, a total of 28 to 37 cyclones are forecast, of which 13 to 20 could become tropical storms, 10 to 15 into category I and II hurricanes, and from 7 to 11 categories III, IV , V or with winds exceeding 250 km / h.

Despite the constant calls for attention, unfortunately today large sectors of the market are reluctant or skeptical to transfer their risks through insurance, which is accentuated in developing countries such as Mexico, where the culture o insurance penetration is practically nil, at almost all levels.

Suffice it to mention that according to the Mexican Association of Insurance Institutions (AMIS), in Mexico, only  6.5%  of  homes  are insured at the initiative of their owners,  5%  of  micro-enterprises ,  15%  of small  companies and close to of the  50% of medium and large .

These forecasts should translate into an increase in the degree of awareness and precautions to be adopted, especially in high-risk areas, seeking to contract coverage for hydrometeorological phenomena, with special emphasis on monitoring that the insurance of properties and contents (many of the more valuable occasions than the buildings themselves, such as in units with machinery, appliances, furniture and works of art) is carried out in a fair proportion, as well as the consequential losses and extraordinary expenses that the
claims could entail.

Last but not least, it refers to the other side of this same coin: that of insurance companies, which, although they will face important challenges given the limitations imposed by the new global reality generated by the health crisis, the truth is is that more than ever they should be attentive to the times and forms to favor quick compensation, as this will not only benefit their policyholders individually, but will also make a great social contribution to promote a speedy economic recovery.

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